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Progress Releases 2009 Year-end Reserves Information

CALGARY, Feb. 9 /CNW/ - (TSX-PRQ) - Progress Energy Resources Corp. ("Progress" or the "Corporation") today released its 2009 year-end reserves information. In January of 2009 Progress Energy Trust ("Trust") and ProEx Energy Ltd. ("ProEx") completed a plan of arrangement which resulted in a reverse take over of ProEx. As a result of the structure of the transaction the new public entity named Progress Energy Resources Corp. ("Progress" or the "Corporation") was created. The reserve reconciliation provided herein, is accounted for as a reverse takeover, whereby the Trust was deemed the acquirer of ProEx and therefore, as a result, the reserves information presented below reflect the history of the Trust with ProEx being the acquired entity in 2009.

Highlights
- 2009 year-ending proved plus probable reserves were 155.1 mmboe with
a reserve life index of 13 years based on fourth quarter 2009
production of 31,400 boe per day annualized;
- Total reserve additions, net of revisions and inclusive of the
acquisition of ProEx, were 51.2 mmboe proved and 76.7 mmboe proved
plus probable;
- Proved plus probable finding and development ("F&D") cost of $13.88
per boe including the change in future development capital ("FDC");
- Proved plus probable finding, development and acquisition ("FD&A")
cost of $19.78 per boe including the change in FDC;
- 35 percent of the Corporation's 2009 capital activities focused on
the pursuit of Montney exploration and delineation drilling in the
Foothills of northeast British Columbia. As a result of these
efforts, 16.7 mmboe of proved plus probable reserves were booked to
the Montney play at the end of 2009;
- In the Town South project area, where the Company has initiated phase
one of its Montney development program, 12.0 mmboe of proved plus
probable reserves were booked.
- Several additional Montney discoveries have been made on Progress
lands in 2010. These discoveries remain unbooked as the completion
timing after year-end does not allow recognition of the reserves in
this report;
- The Corporation's strong performance continued in the Gold Creek and
Wapiti areas where 12.1 mmboe of proved plus probable reserves were
added. Of these, 8.4 mmboe were in the form of 37.5 net future
drilling locations where multiple stacked sands have been mapped over
a continuous area. These locations represent approximately 15
percent of the total locations identified by Progress in the area.

In this news release, all estimates of natural gas and petroleum reserves and production are presented on a "company interest" basis (as defined below), unless expressly indicated that they have been presented on a "gross" or "net" basis. The Company's actual natural gas and petroleum reserves and future production will be greater than or less than the estimates provided in this news release. The estimated future net revenue from the production of the Company's natural gas and petroleum reserves does not represent the fair market value of the Company's reserves.

Supplemental Reserve Reconciliation Information
- The opening balance is equal to the Trust's 2008 closing balance
representing 62.8 mmboe of proved reserves and and 90.2 mmboe of
proved plus probable reserves;
- The closing balance for 2009 is 102.3 mmboe proved and 155.1 mmboe
proved plus probable. Based on the 2008 year-end proforma reserves of
each of the Trust and ProEx, this results in a three percent reduction
in proved reserves and a two percent increase in proved plus probable
reserves.
- A portion of the reserves recognized in ProEx's 2008 closing balance
were not carried forward in the reserves recognized as acquired by
Progress. Approximately 9% of the closing proved plus probable
balance was not carried forward in association with undeveloped
drilling locations where the expected recovery was adjusted to be
inline with the performance of offsetting producers or where the
location was dropped entirely. The Corporation is unlikely to
deploy capital to these dropped locations in the foreseeable future
due to its depth of other opportunities and the current gas price
environment. In addition, 8% of the closing proven plus probable
balance was not carried forward in association with certain producing
wells in the Julienne, Caribou and Green properties where production
declines over the past 12 months have warranted adjustments from the
original estimates.
Replacement Costs (Unaudited)
- FD&A cost of $27.09 per boe, proved and $19.78 per boe, proved plus
probable, including the change in FDC;
- F&D cost of $18.79 per boe proved and $13.88 per boe, proved plus
probable, including the change in FDC;
- The three year average F&D cost of $18.48 per boe, proved and $14.12
per boe, proved plus probable including the change in FDC.
In addition to the detailed information disclosed in this news release
more detailed information will be included in Progress' Annual Information
Form ("AIF").
PRESENTATION OF PROGRESS' NATURAL GAS AND
PETROLEUM RESERVES AND PRODUCTION INFORMATION

Disclosure of Information

In addition to the detailed information disclosed in this news release more detailed information on a gross basis (working interest before deduction of royalties without including any royalty interests) will be included in Company's Annual Information Form ("AIF") in addition to the full NI 51-101 disclosure for the year ended December 31, 2009 which will be filed on or before March 31, 2010.

The Company has adopted the standard of 6 mcf:1 boe when converting natural gas to boes. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Certain of the following definitions and guidelines have been prepared by the Standing Committee on Reserves Definitions of the CIM (Petroleum Society). Further information is contained in Section 5.4 of Volume 1 of the COGE Handbook (First Edition, June 30, 2002). Readers should consult the COGE Handbook for additional explanation and guidance. Certain other terms used in this news release have the meanings assigned to them in NI 51-101 and accompanying Companion Policy 51-101CP, adopted by the Canadian securities regulatory authorities and in Staff Notice 51-324 of the Canadian Securities Administrators.

The following tables set forth certain information relating to Progress' crude oil, natural gas and natural gas liquid reserves and the net present value of future net revenues associated with such reserves as at December 31, 2009, as evaluated by GLJ in the GLJ Progress Report dated February 8, 2010 based upon forecast price and cost assumptions. The information set forth below is derived from the GLJ Report that was prepared in accordance with the standards contained in the COGE Handbook and the reserves definitions contained in NI 51-101 and the COGE Handbook. Progress engaged GLJ to provide an evaluation of proved and proved plus probable reserves. Numbers in the following tables may not add due to rounding.

All future net revenues are stated prior to provision for interest, general and administrative expenses and after deduction of royalties and estimated future capital expenditures. Future net revenues have been presented on both a before and after tax basis.

It should not be assumed that the present worth of estimated future cash flow presented in the tables below represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. The recovery and reserve estimates of Progress' crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquid reserves may be greater than or less than the estimates provided herein.

Certain information regarding Progress set forth in this news release contains future plans and operations, and other forward-looking statements that involve substantial known and unknown risks and uncertainties. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. Such statements represent Progress' internal projections, estimates or beliefs concerning, among other things, an outlook on the estimated amounts and timing of capital investment, anticipated future debt, revenues or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements are only predictions and actual events or results may differ materially. Although Progress believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Progress' actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Progress.

In particular, forward-looking statements included in this news release include, but are not limited to, the likelihood of Progress to deploy in the foreseeable future capital to portions of the reserves recognized as acquired by Progress; and future development costs. In addition, statements relating to "reserves" or "resources" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future.

These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including the impact of general economic conditions; volatility in market prices for crude oil and natural gas; industry conditions; volatility of commodity prices; currency fluctuation; imprecision of reserve estimates; liabilities inherent in crude oil and natural gas operations; environmental risks; incorrect assessments of the value of acquisitions and exploration and development programs; competition from other producers; the lack of availability of qualified personnel or management; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; hazards such as fire, explosion, blowouts, cratering, and spills, each of which could result in substantial damage to wells, production facilities, other property and the environment or in personal injury; stock market volatility; and the ability to access sufficient capital from internal and external sources.

With respect to forward-looking statements contained in this news release, Progress has made assumptions regarding: current commodity prices and royalty regimes; availability of skilled labour; north American sulphur prices; timing and amount of capital expenditures; future exchange rates; the price of oil and natural gas; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; royalty rates and future operating costs.

Management has included the above summary of assumptions and risks related to forward-looking statements provided in this news release in order to provide Shareholders with a more complete perspective on Progress' future operations and such information may not be appropriate for other purposes. Progress' actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive there from. Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this news release and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Finding and Development Costs
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The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year.